Food & Power Newsletter: EU Antitrust Chief Says “Beware” of Bayer-Monsanto Control of Farm Data

Margrethe Vestager, the European Union’s top antitrust enforcer, appears also to be focusing on how much control a combined Bayer-Monsanto would have over the data generated from private farms.

February 23, 2018  |  by Open Markets

When Bayer first announced its plan to purchase Monsanto, most observers focused on how much power the two corporations already wield over agricultural inputs like seeds and pesticides. But Margrethe Vestager, the European Union’s top antitrust enforcer, appears also to be focusing on how much control a combined Bayer-Monsanto would have over the data generated from private farms. 

“Digitalization is radically changing farming,” Vestager told a German newspaper on Feb. 10. “We need to beware that through the merger, competition in the area of digital farming and research is not impaired.” 

Vestager’s comments may represent an additional stumbling block for Bayer’s planned takeover of Monsanto, which includes a significant farm data component. Perhaps more importantly, they signal a growing concern among advocates and watchdogs about market power in this new sector. 

A century ago, farmers relied on public weather reports, publications like the Old Farmers’ Almanac, and their own knowledge to predict weather patterns and plant accordingly. But today, many rely on complex systems like satellite imaging to monitor everything from rainfall amounts to crop diseases to pest control measures. Correctly designed, these systems can provide individual farmers with greater information about what and when to plant, which can help them improve their yields. But, the same big corporations that control farmers’ access to seeds, pesticides, and fertilizers, are increasingly exerting control over the information that farmers need to go about their business. 

University of Wisconsin Law Professor Peter Carstensen says this creates a variety of conflicts of interest. “The fundamental problem is having these guys as the source of all kinds of planting and other information,” as well as many other products the farmers need. The corporations, he says, could use their control over data to steer farmers toward particular seeds and pesticides, or to get farmers to buy larger quantities than they might actually need. 

“If they own the data, then they can dictate what they plant, where they plant it, and how they’re harvested,” said Joe Maxwell, Executive Director or the Organization for Competitive Markets. 

In recent years, top-tier agriculture corporations—including DuPontMonsanto and John Deere—have invested heavily in buying up smaller companies that specialize in digital and data-based farming tools. In fact, just last week, Syngenta (which merged with ChemChina in 2017) acquired FarmShots, a company that provides and analyzes satellite imagery to measure plant health.

Indeed, Bayer’s proposed acquisition of Monsanto appears to be, in large part, a way to gain control over that corporation’s wealth of data and digital farming tools. As the American Antitrust Institute reported in October, the deal would combine Bayer’s “pest, weed, and disease modeling analytics and hyper-localized decision support tools” with Monsanto’s “seed and planting scripts creator, nitrogen advisors, and field-level weather information and notification.” In other words, the deal would create a larger, more integrated digital service platform for farmers. Where before farmers could compare different data services for different information, Bayer-Monsanto would create a one stop shop that they likely couldn’t afford to avoid.

According to Joe Maxwell, big agribusiness’ growing control over this technology is bad news for farmers. “We will see a structural change” in the division of profits from farming, he says, “not-unlike what has happened to poultry contract growers—71% of whom live below the poverty level.”

What We’re Watching

  • Grocery corporation Albertsons announced this week that it would buy drug store chain Rite Aid in a deal backed by Cerberus Capital Management, a private equity firm. The 2,569 stores that Albertsons will receive through the deal represent the portion of Rite Aid not acquired by Walgreens last year. Albertsons’ acquisition appears to be a response to heavy consolidation in drug retailing as well as Amazon’s growing dominance in retail.
  • Independent suppliers to Whole Foods, recently acquired by Amazon, are beginning to notice changes at the store, CNN’s Lydia DePillis reported. Whole Foods has told some vendors that it will raise prices for high-profile product placement at the stores and change its system for food demonstrations, among other changes. As Leah Douglas reported for Food & Power in January 2017, Whole Foods last year decided to centralize purchasing, a change that limited independent vendors’ access to the supermarket chain, which used to conduct regional purchasing.

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